Green Room

The WSJ likely understated massive union political spending

Don’t get me wrong: The Wall Street Journal’s Tom McGinty and Brody Mullins performed a valuable public service in compiling the Department of Labor data showing that Big Labor spent $3.3 billion more on political activity than the $1.1 billion they reported to the Federal Election Commission and congress. However, their analysis appears to take the numbers for political spending listed by the unions at face value. You will be shocked, shocked to learn those numbers might not be rock solid.

For example, we could look at the most recent annual report filed by the National Education, one of the nation’s most politically active unions and the one whose political activities sparked the current rules of disclosure of union political spending. The NEA’s most recent LM-2 disclosure form (downloadble here) lists tens of millions of supposedly non-political grants paid to its affiliates for its UniServ program. UniServ helps affiliates pay for their labor negotiators and professional staffers — but UniServ directors also administer fund-raising solicitations for the NEA’s political action committee, organize selection of union delegates to party nominating conventions, and organize activities to support NEA-endorsed candidates during election campaigns. The notion that none of the tens of millions of UniServ dollars funneled by the national NEA seems like a bit of a stretch. This may not affect the WSJ calculations, because McGinty and Mullins followed the money down to the state level. But it does reveal a problem with the current reporting system and should be remembered the next time you hear union defenders brag about the transparency of the system. It’s only transparent if you do the extraordinarily tedious work of following all of the supposedly non-political money down to the affiliate level.

However, the WSJ analysis likely understates Big Labor’s indirect political spending. For example, as Rishawn Biddle noted at The American Spectator: “Between 2005-2006 and 2008-2009, the NEA has increased its donations to nonprofits by nearly a six-fold, from $4 million to $26 million.” If you are thinking that those nonprofits are generally Democratic Party client groups, you would be dead on. If you are thinking that the NEA does not always categorize this spending as political, you would be dead on.

Mike Antonucci (who also blogs in HotAir’s Greenroom on labor issues) has written about this issue. Two lesser-known groups he mentions as essentially NEA front groups — Great Lakes Center for Education Research and Practice and Communities for Quality Education — turn up in the NEA’s most recent LM-2 disclosure, collecting $250,000 and $1,000,000, respectively; neither is classified as political spending. Other names may be more familiar. For example, the NEA paid the Democracy Alliance $85,000 for program development the union classified as an administrative expense. They classified $100,000 paid to Media Matters for public relations as an administrative expense. They paid groups including (but not limited to) the NAACP ($25,000), the National Action Network ($20,000), National Jewish Democratic Council ($5,000), and People for the American Way ($125,000) “community public education grants” and classified them as administrative expenses.

Of course, it could be that the NEA has super-duper explanations for why all of this spending is non-political. After all, some of these groups are nominally supposed to be non-political (although much of the leftie complaining about rightie groups is that their tax-exempt groups are political). But no one is asking for explanations. A February 2012 report (.pdf) from the House Committee on Oversight and Government Reform notes:

In addition to weakening Form LM-2 reporting requirements, the Administration has quietly scaled back the Department of Labor’s ability to conduct effective financial oversight of labor organizations. In addition to a 35% voluntary reduction in its staffing allotment, the OLMS [Office of Labor-Management Standards] completely disbanded the Division of International Union Audits, “a division that had responsibility for auditing the largest labor organizations in the country,” some with more than $600 million in receipts.” These actions have had an immediate impact: on page 21 of its FY 2012 Congressional budget justification, OLMS flatly states that it plans to conduct “zero I-CAP audits in FY 2012.”

Yep, the Obama administration is declining to enforce laws it does not care for — another shocka. The House report further notes the administration “also completely eliminated Form T-1, which required unions to report the finances of trusts in which they were invested. These trusts constitute a major repository of union funds, and Form T-1 closed a major loophole in reporting requirements. That loophole is, once again, wide open.” That’s the nice way of putting it. Heritage has called these trusts “little more than slush funds available only to selected officials who use the money to pay for campaign activities like fund raisers, candidate literature and get-out-the-vote efforts.”

Again, the WSJ, McGinty and Mullins deserve plaudits for doing the job that most of the establishment media refuses to do. However, the potential for creative accounting in the current disclosure rules, the obstacles to getting a clear picture of union spending and the lack of enforcement of the current rules all deserve further attention from Congressional Republicans and future Republican administrations.

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How about this: Stop all Non-Profits and all Tax Exemptions for all organizations including municipalities, schools, churches, hospitals, politicians etc. Let everyone pay their taxes for a at least the next 2 years during which we can reform the whole Tax Exemption program and then start analyzing any applications!